The Secret to Attracting 'Oil Money'... Arabia's 'Korean Merchant' Lee Woonghee [Market's Eye]

Startup H2O Hospitality CEO Lee Woonghee
Solving the Opaque Hotel Management System Issues
Resilience Like a Tumbler Doll Is the Greatest Strength

There is a Korean startup attracting Middle Eastern 'oil money.' It is the tech company H2O Hospitality, which operates lodging and leisure facilities on behalf of others. Hospitality is a term that collectively refers to industries related to hotels, tourism, travel, and leisure.

Founded in 2015 by CEO Lee Woong-hee, H2O has received a total cumulative investment of approximately 48 billion KRW from domestic and international investors over the past decade. It has signed a series of investment contracts with entities such as the Abu Dhabi Investment Authority, Saudi Ministry of Investment, Saudi Tourism Fund, and Saudi National Development Fund.

H2O is also a key partner in mega tourism projects like Saudi Arabia's 40 trillion KRW-scale tourism development project, the 'Red Sea Project.' What aspects of H2O have captivated investors so much?

Lee Woong-hee, CEO of H2O, is being interviewed by Asia Economy. Photo by Jo Yong-jun jun21@

Oil Money Focuses on H2O’s Developed 'Flow Solution'

"Many people approach the Middle East thinking it is a region rich in liquidity that will easily invest money, but that is absolutely not the case. All the good deals worldwide are concentrated in the Middle East. Because there are many large and profitable deals, it is important to clearly present what we can offer. In the case of Saudi Arabia, tourism infrastructure is not yet fully developed like in the United Arab Emirates (UAE). They are aggressively pouring in enormous amounts of money, and giga projects worth over 10 trillion KRW are underway in the tourism sector. H2O clearly explained what solutions it can provide as a software service company and what growth potential it can demonstrate by participating in these projects."

CEO Lee revealed this as the secret to attracting 'oil money.' In the rapidly growing Middle Eastern tourism industry, H2O’s 'Flow solution' is regarded as a revolutionary system. The Flow solution solved the problem of past hotel management systems (PMS) that kept customer data 'in the dark' from the time of booking until the customer actually arrived and filled out the accommodation log.

It allows customers to check in via mobile without waiting at the front desk and request needed services through a chat app. The advantage of the Flow solution is that everything from booking to payment can be done at once through a messaging app. Its integration with Oracle Hospitality (OPERA), the world’s number one global hotel management system, is another reason it is gaining global attention.

From the hotel’s perspective, accumulating customer data and understanding customer characteristics greatly helps in competing with other hotels. The software solution was created in a modular form so hotels can pick and choose only what they need to use.

Based on solution service contracts with domestic clients like High1 Resort and Lotte Hotel, H2O expanded into global markets such as Thailand, Singapore, and Vietnam. In 2020, it officially made its name known in the global tourism industry by signing solution contracts with famous hotels and resorts. As of April 2024, the number of rooms worldwide using H2O’s solution reaches 210,000. H2O has overseas branches in Japan, Singapore, Saudi Arabia, and Abu Dhabi. CEO Lee recently moved to Abu Dhabi with his family.

"I feel we can become a proper global company. Middle Eastern oil money has invested wildly overseas for the past 50 years. From their perspective, the Middle East is not only the Islamic region but also includes Central Asia, Europe, India-Pakistan, and Africa as one. This is a somewhat unfamiliar viewpoint for us. If we establish a solid position in the Middle East, we can become a company that covers Europe and Africa as well. Dubai has already become the center of the global hotel industry. Global luxury hotels like Burj Al Arab, Burj Khalifa, and the recently opened Atlantis The Royal keep emerging. Abu Dhabi is also extremely aggressive in the tourism industry. Global museums keep coming in. The Louvre Museum has already opened, and the Guggenheim Museum is being built next to it. Also, right next door, the Sheikh Zayed Museum, a national museum shaped like an opera house, is preparing to open."

The Middle East is popular among Europeans as a long-term vacation destination because the weather in autumn and winter is clear and cool compared to the hot summer. Saudi Arabia has recently opened its doors as well. Crown Prince Mohammed bin Salman is actively involved. Tourist visas are being issued, and they are planning to create another national airline. This represents a tremendous opportunity for CEO Lee.

Lee Woonghee, CEO of H2O, is being interviewed by Asia Economy. Photo by Jo Yongjun jun21@

99% of Work Is People... Resilience and Grit Like a Tumbler Doll

CEO Lee Woong-hee majored in Hotel Management at Cornell University in the United States. At that time, he had the opportunity to meet famous hotel executives who graduated from hotel management departments. When he asked them about the strengths of their hotel chains, most answers were about goods or people, such as 'world-class chefs' or 'luxury hotel bedding.' There were no answers about how hotels operate efficiently or how they adapt to the major trend of digital transformation.

He believed that if luxury famous hotel chains continue to maintain the same operating methods as 100 years ago, they have no future. His unique ideas and passion gained support from domestic and international investors. Besides Middle Eastern 'oil money,' well-known domestic investment firms such as Kakao Investment, KDB Industrial Bank, Samsung Venture Investment, and IMM Investment have firmly established themselves as major investors in H2O. CEO Lee’s greatest strength is his resilience like a 'tumbler doll' that gets back up no matter how many times it falls.

"I believe 99% of work is about people. When good people work with good intentions, the results can only be good. I sincerely believe this is the answer. It is important to unify the organization’s goals and continuously remind everyone of them. The accelerator CEO who first discovered H2O called me a 'cockroach.' He said I don’t die no matter how many times I get stepped on. I have gone through a lot of hardships. It is difficult to prepare in advance for diplomatic issues or conflicts between countries while running a business. But I do not give up. If you take everything away from me except my family and throw me into the middle of the desert, I think I could come back here by selling sand. Please watch over me."